Oil Prices Rise as Hormuz Tanker Attacks Disrupt Shipping
Oil prices rose by more than $1 a barrel on Thursday as continued attacks on tankers in the Strait of Hormuz offset pressure from rising crude output. Brent futures were up $1.20, or 1.3 per cent, at $93.96 a barrel at 1508 GMT, while US West Texas Intermediate crude rose 53 cents, or 0.6 per cent, to $87.06.
Both benchmarks were still headed for a weekly decline. Prices had fallen in early trade before President Donald Trump wrote on social media that the United States did not need a deal with Iran. “Those days have long since passed. We’ve got their money, Hundreds of Billions of Dollars, and we’ve got their Strait!” he wrote.
In the strait, tankers are still ablaze and oil spills are washing ashore, while drones and missiles have hit infrastructure across the region. On Thursday, Iran’s military said four oil tankers were hit by explosions in the Strait of Hormuz after ignoring warnings. Reuters said it could not immediately verify the Iranian account.
Elsewhere, Ukraine continued attacks on Russian energy infrastructure, saying it targeted the port area of Ust-Luga by the Baltic Sea in Russia’s northwest with drone attacks.
Why the strait matters for oil prices
The Strait of Hormuz is a narrow waterway that carries a large share of the world’s seaborne oil, so any threat to shipping there moves prices at once. Attacks on tankers in the strait had already pushed oil prices up on Wednesday, when Brent climbed from two-month lows.
After 37 ships were attacked in October, the highest monthly total since the start of the Middle East war, recent data showed little sign of fewer attacks in November, according to the Washington Institute for Near East Policy.
Wednesday’s rise had already shown the pattern. Brent climbed $1.04 to $92.53 a barrel in early trading after a tanker was struck north-east of Lima in Oman, according to the United Kingdom Maritime Trade Operations agency, and Iran’s Revolutionary Guards Navy said two tankers caught fire after hitting naval mines. Analysts warned that even a deal would not restore flows at once, given mine clearance, insurance and shipowner caution, LSEG Oil Research noted.
What it means for Pakistan
Pakistan buys most of its crude oil from abroad, so a Brent price near $94 a barrel feeds straight into the next fuel price review. Petrol was cut by Rs3 a litre and diesel by Rs4 in the latest revision, which took effect on November 13, but a sustained rise in Brent would push the other way at the next fortnightly review.
Pakistan has already rejected expensive LNG cargoes as energy costs climb, and it condemned the attack on Aramco facilities in Riyadh this week as the regional conflict widened.
For households, the link is direct. Fuel prices set transport fares and food prices, so a rise in Brent eventually reaches the pump and the kitchen. The government reviews fuel prices every two weeks, and the next review will have to weigh the Hormuz disruption against the weekly fall in crude.
What to watch next
Traders will watch whether the attacks ease, whether Iran follows through on its warnings, and whether OPEC+ output growth keeps a lid on prices. A wider disruption in the strait would push Brent higher and make Pakistan’s next fuel review harder.
Frequently asked questions
Why did oil prices rise on Thursday?
Prices rose by more than $1 a barrel as continued attacks on tankers in the Strait of Hormuz offset pressure from rising crude output from OPEC+ producers.
How much did Brent and WTI rise?
Brent futures rose $1.20, or 1.3 per cent, to $93.96 a barrel. US West Texas Intermediate crude rose 53 cents, or 0.6 per cent, to $87.06.
What did Iran say about the tankers?
Iran’s military said four oil tankers were hit by explosions in the Strait of Hormuz after ignoring warnings. Tankers are still ablaze in the strait and oil spills are washing ashore.
What does the Hormuz disruption mean for fuel prices in Pakistan?
Pakistan imports most of its crude oil, so Brent near $94 a barrel puts pressure on the next fortnightly fuel price review. Petrol was cut by Rs3 and diesel by Rs4 in the latest revision, but a sustained rise in Brent would push prices the other way.
